Sustained office demand buoys construction sector

The report, the third annual Belfast Crane Survey produced by Deloitte Real Estate, shows a total of 35 schemes were under construction in the city centre – with 21 completed in 2018 and nine set for completion over the coming year. That compares with 30 schemes under construction in the previous year’s survey.

This survey includes eleven new hotels, nine office developments, six student accommodation projects, three residential developments, three educational facilities and two retail schemes.

Around 290,000sqft of office space was completed in 2018 across five schemes. The office market was buoyed at the end of the year by the announcement that Deloitte’s new Belfast headquarters will be in McAleer & Rushe’s Bedford Square development, due for completion in 2021. Other significant pre-lets are adding to the city’s positive developer sentiment.

Belfast Harbour’s 250,000 sq ft City Quays 3 will be one of the largest Grade A office developments to be built in Northern Ireland when moves to the build phase after receiving planning approval and major schemes including the Belfast Waterside project and Tribeca Belfast should also help sustain activity in the market.

“The 2019 Belfast Crane Survey captures the changes that have taken place in development trends in the city,” said Simon Bedford, partner in the Deloitte Real Estate practice.

“This survey, we’ve seen the completion of several student accommodation buildings which will widen the higher education offering, increase city centre living and bring new life to neglected parts of the city.

“The city also has a healthy appetite for new office developments and is making good progress against the Belfast Agenda target of 1.5 million sqft of new space by 2021.”

There was potential, he said, to increase that target further as existing demand and new occupier deals in 2019 would instil further confidence in the market, alleviating some of the fears around Brexit.

“Regular job announcements in IT and professional services by companies like Imperva, FinTru and FieldFisher highlight that there will be a continued need for new Grade A office space.”

The one new build office completion in 2018 was the headquarters of Allstate NI, while there has been a significant amount of investment to refurbish and modernise existing space such as River House, The Weaving Works, Flax House and Artola House.

Following a surge of purpose-built student accommodation schemes in recent years, two further developments started on site in 2018, which will deliver 761 beds at York Street and Little Patrick Street. Construction is ongoing on the 720,000 sq ft Ulster University Campus while a £700m capital investment project at Queen’s University Belfast will continue through 2019.

One area cooling down after the recent boom was hotel construction with new construction starts in 2018 set to deliver a further 224 new hotel rooms compared to more than 1,200 rooms added across the 10 hotels that completed during last year.

Deloitte has also highlighted the need for more new residential schemes being developed in order to enable wider growth and evolution of Belfast’s city centre in future.

“The Belfast Agenda’s ambitious target of increasing the residential population of Belfast by 70,000 people before 2035 will be a prime indicator of success for the city moving forward,” said Mr Bedford.

“However, there were no new residential starts during 2018,” he added.

“While residential needs attention, the key ingredients are there for the future success of Belfast.

“With the City Deal package secured and notable projects such as the Transport Hub and new visitor attraction on the horizon, there are reasons to be positive in the coming years.”